Rewatch Our Video Q&A: Five Years After the Financial Crisis, Are We Safer?

Five years ago, the financial system stood on the precipice of collapse. Since then, a thicket of regulations – some enacted, some not – promise to make the system safer. But is it?

Join The Wall Street Journal’s Money & Investing Editor Francesco Guerrera, Chief Economics Correspondent Jon Hilsenrath and News Editor Deborah Solomon to discuss what steps have been taken to shore up the global financial system and what still needs to be done. They’ll be part of a one-hour Spreecast – a live, Web-based question-and-answer session and discussion – at noon Eastern time. It was Sept. 16, 2008 when the Federal Reserve seized control of insurer American International Group Inc.

“I think a number of important steps have been taken to address weaknesses revealed by the financial crisis – but much more remains to be done. Moreover, the slowing pace of implementation has left many people concerned about whether there is sufficient political will to finish the job. We have seen increasing calls for more dramatic reforms in Congress. If regulators cannot get strong rules in place quickly, I would expect pressure to mount.

“To be sure, there have been a number of positive steps since Lehman: There has been good progress at the FDIC on resolution planning and improved communication among the agencies through the FSOC. I think the CFTC has done yeoman’s work getting derivatives rules in place and the CFPB has done well given it’s confirmation difficulties. I also think the Agencies should be commended for working on a simpler stronger leverage requirement which, if sufficient could provide meaningful loss absorbing capacity in these institutions.

“Regrettably, tougher leverage limits, as well as a host of other essential rules, have been proposed but not finalized. These include more stringent regulation of large financial institutions, so-called “enhanced prudential standards,” to limit their interconnectedness and excessive reliance on short-term funding. The Volcker Rule languishes, and reform of money market funds very much remains a work in progress. Less than half of the over-the-counter derivatives market has been moved into centralized clearing. Rules to require the largest financial conglomerates to fund more of their balance sheet with stable, long-term debt have been promised by the Fed, but not yet proposed.

“Main Street wants reform but Wall Street wants to keep its profits. Not only do a number of very important rules remain incomplete, but industry lobbyists keep trying to re-open and weaken the ones which have already been finalized, while fighting ever comma in every proposed rule. This is short-sighted for an industry whose long term success ultimately relies on the public trust.”